Business Environment Analysis of Next PLC and Innovation Impact

This report provides a comprehensive analysis of the business environment, focusing on Next PLC. It explores the impact of innovation and technological changes on the company's operations, sales, and profitability, and subsequently, on the overall economic growth. The report highlights the significance of corporate social responsibility (CSR) within the organization, utilizing Archie Carroll's CSR model to evaluate Next PLC's practices. The study examines how technological advancements influence the company's performance, including improvements in sales and customer relationships, waste reduction, market position enhancement, and employee relations. The report also presents sales and profit data for Next PLC over the past three years, demonstrating the positive effects of technology adoption. Furthermore, the study underscores the importance of innovation in maintaining a competitive edge and adapting to market changes within the retail industry. Overall, the report offers a detailed overview of Next PLC's business strategies and their implications.

BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Task 1...............................................................................................................................................3
1. Innovation and technological change in economic progress of the country............................3
Innovation and technological change in economic progress of Next PLC..................................5
Task 2...............................................................................................................................................7
2. (A) Importance of corporate social responsibility within the organizations...........................7
(B) Archie Carroll’s CSR model for Next PLC.........................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................12
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EXECUTIVE SUMMARY
The following report will discuss the business environment in context of changes according to
the innovation and technology within the company Next PLC. It will also describe the extent to
which the innovation and technology impacts the sales and profitability of the organization and
thus the overall growth of the economy of the country. Most importantly, the sales figures also
support their maximum while acknowledging the concept in detailed manner.
Good and innovative technological changes have become an important element for the
organization which helps to maximize the profitability and thus also enhances the customer
satisfaction and employees as well. This study will also highlight the importance of corporate
social responsibilities that has been performed by Next PLC in efficient manner which also helps
them to fulfil their responsibilities related to ethical, legal, social as well as philanthropic.
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INTRODUCTION
Another word for innovation is the word innovare which means to renew things according to
the perception of taking benefits from the things that needs to be changes in order to achieve pre
determined goals and objectives. It is basically a process through which one can able to renew
and bought up to date by applying new and advanced processes along with the introduction of
new technologies within the company and thus develop successful ideas in order to built new
values (Kahn, K.B., 2018).
Next PLC is a multinational clothing, home products and footwear retailer firm
headquartered in Enderby, England. The company has around overall 700 stores of which approx
500 stores are in UK only and remaining 200 stores are in Asia, Europe and the Middle East
country ( PURCĂREA, T., 2019).
This report will describe the impression of innovation and economic development, their
roles in technological changes along with innovation impact on the operations, sales and profits
of Next PLC. Apart from this, the study will also highlight the concept of importance of
corporate social responsibilities of Next PLC with the help of application of model i.e. Archie
Carroll’s CSR model.
MAIN BODY
Task 1
1. Innovation and technological change in economic progress of the country
Innovation is the practical implementation of ideas that result in the production of new and
improved goods and services or inventing something new within the existing goods and services
offered by the company. While technology is the complete summation of techniques, processes,
skills and methods utilized by the company in order to produce efficient goods and services for
the accomplishment of organizational goals and objectives. Technology is a way through
which the organization will able to adopt innovative changes for their existing products and
services which ultimately enhances the profitability of the firm (Arco-Castro, 2020).
Technological innovation better helps the business activities of companies in order to
improve their business value by working on technological aspects of products and services
offered by them. For instance, in Tesco the technological advancements have created
opportunities along with some challenges as it includes moving their strategies from ‘bricks
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and mortar’ to ‘bricks and clicks’. Tesco directs their online grocery platform with just
‘click and collect’ functionality. Both the terms are basically complete interaction or
combination of different technologies that helps the company in order to make their
offered products and services successful. Technology plays a significant role in the
functioning of innovation as the products have been renovate according to the current
desires of the consumers or the market trends has been done by the company in a very easy
manner with the help of technology ( Reddy, P.K., 2018). It helps to make the process short
and fast for employees and for consumers as well. In an increasing competitive
environment, consumers’ loyalty and repetition in the buying behaviour of the customers is
the key element to establish a successful and economically sustainable business model
within the business world. So, it is highly important to consider new and innovative
opportunities being offered to companies through which new developments in technology
and products have been done by the organization to satisfy needs and desires of the
customers (Rajapathirana, R.J., 2018).
The major benefit of innovation and technology or we can say it as technological
innovation towards the economic growth as innovation can lead towards the higher productivity
level within the organizations which means that with the similar amount of input the company
will able to get maximum or greater output which ultimately enhances the profit margin of the
company in total. As productivity of the company rises, more of goods and services are produced
and thus the economy of the country also grows in well structured manner. Most of the
economists agree that technological innovation is the key driver of economic growth and human
lifestyle within the society. There are various effects of innovation which includes that
technological innovation brings benefits to the company and overall society as well. It enhances
productivity and lead citizens towards better life style or standard of living. The future
generations are more towards the people who are able to take advantage of technological
innovation within the organization as the results will take some time (Asim, Z., 2019).
Innovation might fail some traditional models that have been used by managers or leaders from a
very long duration of time. In order to foster the technological changes within the Next PLC, the
leaders of the company ensures effective management of public policies which includes the rule
related to laws, property rights and various other permissions in order to run their business
activities but with the involvement of technologies the company is able to manage their work in
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permission less and more fast manner ( Kahn, K.B., 2018). Establishment introduces technology
within their business in order to bridge the gap between online and offline stores to create a fully
personalised shopping experience for their customers. These technologies helps to built new
experiences to influence their consumers which helps them in shopping buying decisions as well
as in store services along with constant feedback by them to enhance their products and services
(Visvizi, A.,, 2018).
Innovation and technological change in economic progress of Next PLC
Next PLC is a United Kingdom based retailer company which deals in clothing,
accessories, footwear, home products as well as beauty products. The company has various
segments which also offers services to their consumers in the sector of NEXT online, NEXT
Retail, NEXT Finance, NEXT sourcing and many other. Initially the company was operated
from their stores in offline manner but with the introduction of new and technological
advancements, the company is dealing on online platform and offer various services to their
consumers in order to satisfy them effectively. Innovation plays an important role in the success
of the Next PLC in today’s highly competitive business environment especially when the
consumers have various other options available at competitive prices. Entrepreneurs need a
border to survive in the market space and to stand out in front of their competitors and in terms
of Next PLC that boundary is the innovation concept in order to boost their productivity, growth
and profitability of the company ( Song, M., 2017). Innovation does not always mean great
invention or complete replacement of products; it might include simple changes, incremental
improvements in any area of the organization. For instance in UK the companies adopts
digitalization or decide to dealing with their products and services through digital platform are an
innovation for the company as well as their employees. Below describe are few benefits that has
been taken by the firm in order to enhance their functioning, profitability as well as the overall
economic growth of UK are:
 Improves sales and customer relationship: Lack of innovation in products and
services may lead losses for the company as there are various competitors available
in the market space that are ready to serve consumers in effective manner. So,
company ensures that through technological innovation, the services and products
offered to their consumers must satisfy their needs and desires. The investment of
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money and time by organizations, customers will notice and attracted more towards
the services offered by company appreciate the extra efforts and thus translate the
output in to more sales which ultimately maximizes the profit (Goyal, P., 2019).
 Reduce waste and costs: Innovation lead or helps the company to reduce the waste
in the business of company which helps the organization towards better position
within the market space and completion of long term roles. Reduction is waste and
production costs helps the firm to lower down their cost of final goods and services,
better profit margins, improved customer services and enhancement in
competitiveness (Sarkar, B., 2020).
 Boost market position: Innovation help the companies to identify the requirement
of market changes more quickly and get ahead of opportunities and this also helps
the organization to differentiate themselves from other competitors. Such kind of
innovation can come through the continuous evaluation of market trends after
analysis of customers’ demands, suppliers, advisors and competitors as well in
order to maximize the profit margin and satisfy the consumers as well ( Edwards-
Schachter, M., 2018).
 Improve employee relations: Innovation generates success for the company and
thus best source of idea for them. More profit helps the organization to reward their
employees or satisfy their needs and demands in efficient manner and thus
improves the motivation within them enhances the relationship between the
company owners and their employees which increase the overall productivity level
of the employees (von Thiele Schwarz, U.,, 2017).
With the involvement of technological changes within Next PLC or online platform the company
is enabling to grow their sales at a compound rate of 10% per annum as previously it has been
notified as 4.8% per annum along with the improvement in turnover of £816 million to an
estimated of £2.1 billion recent year. The physical grading space occupied by Next has enhanced
by 0.6% despite few stores closure throughout the year (Hashim, H., 2018). The company is keep
accelerate their growth with the usage of effective technological innovations within the
organization. Along with the involvement of speed related to change and innovation within the
organization, the group is likely to generate more of cash or profits within the organization. With
the involvement of online growth the company is able to increase their investment level within
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the market place and thus the management of supply and demand of products and services
offered by Next PLC in most appropriate manner (Cho, Y.S., 2020). Technological advancement
or innovation helps the establishment to evaluate the requirement of products in more fast and
efficient manner. Their approach is to make their services more flexible for their users so that
their cost base and operations become running successfully and they do not have to face negative
effects on their sales and opportunities within the market place. It has been analysed that
reinvention and continuous experimentation within the business activities helps to preserve the
integrity of brand, quality of their operations and complete profitability of the whole group. The
innovation is difficult task ad company remain faces certain challenges as well while their
operations but with the help of their motivated staff members the Next PLC is able to overcome
from that challenges and easily accept changes within the organization (Burger-Helmchen, T.,
2017).
Sales and profit of Next PLC over the past 3 years after using technology
Total Sales Jan 2020 Jan 2019 Jan 2018
Retail 1951.6 1818.4 1789.29
Finance 269.80 253.40 234.98
Other services 95.9 93.87 87.32
Total Group Sales 2317.30 2165.67 2111.59
Task 2
2. (A) Importance of corporate social responsibility within the organizations
Corporate governance is the combination of regulations, procedures and laws by which the
whole procedure of the business activities has been operated, controlled and regulated with the
concept of getting profits. While the corporate social responsibility is an administrative concept
in which company combine social and environmental concerns in their business operations and
communication with their stakeholders (Goswami, S., 2019). For instance, in the October 1990,
Polly Peck, a huge quoted company was placed into administration. At the beginning of August
1990 the share price of the company was 418 per share but by the September 1990 it has fallen to
108 per share. This whole represented a loss to the company nearly about 75% of their total
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value in just two months. Trading of shares was suspended by London Stock exchange and the
organization collapsed with estimated debt of £1.3 billion. Actually, the whole process is the
scandal of corporate governance which includes liquidity issues, agency problems due to
diversification, collaboration and mergers of different companies as well as long term debts. The
major purpose of corporate social responsibility to give back to the society or community in
which the organization operates, do participate in charitable processes and thus provide positive
social values within the market space. From the knowledge about the corporate governance it has
been evaluated that the revolution has been started from early 1990’s with the Cadbury report on
the financial aspects of corporate governance to which the code was attached for their best
practices. In July 2018, the financial reporting council released the new 2018 UK corporate
governance code, which is designed to build on the relationship between companies,
stakeholders as well as shareholders and make them key to long term sustainable growth of the
UK economy (Bolton, B., 2019).
Now a day, each and every business are focus more towards their CSR activities to make a
difference and build a positive brand image around the company (Tao, F., 2021). Next PLC also
ensures their complete focus on CSR activities in order to complete their roles and
responsibilities towards the society in which they operate. Next PLC works in an ethical and
sustainable way and deal with its environmental and social impacts on their business operations.
CSR means careful completion of human rights, the environment, community and society
( Vaizey, J.,2018). It is highly important for any company and thus for the Next PLC as well
to operate in a way that demonstrate social responsibilities of business efficiently. Social
responsibilities and ethical business practices are important to their success. As per current
scenario, customers are also aware about the importance of corporate social responsibilities
and actively seek products from businesses that operate effectively or ethically with their
CSR activities. Adopting appropriate CSR activities demonstrates that the business which
has been started by the owner is not only for the profit maximization but also for the
betterment of the society people and environment as well. There are certain benefits that
enhance the reputation of the firm within the market place are:
 Encourages customer loyalty: People are attracted more towards the organizations who
serve their activities for charitable issues as well. And in order to make their customers
attracted more towards their services, they have to follow the desires of the customers. If
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a consumer feels like they are living out their values by supporting a good and ethical
business, then they are more likely to stick to that particular brand for longer span of time
(Leninkumar, V., 2017).
 It gives businesses a competitive edge: The companies that cater the CSR activities
within the society gives higher competition to other companies who do not adopts CSR
activities ( Ngah, A., 2018). Whether the companies are also offered same products to
them, then also the customers prefer to take goods and services that follow ethical
business practices effectively.
 Makes employees satisfied and happier: In context of Next PLC the managers believe
that with the introduction or adoption of effective CSR activities within their company,
the employees working in their organization feels more satisfied and believes that their
company makes a difference in the world. This helps to create positive environment and
culture within the company and thus reduces the stress level of their employees (Harris,
L., 2020).
 Makes business more sustainable: When an organization thinks to adopt corporate
responsibility in total, then the company tries to become more innovative and creative.
Nurturing innovation and creativity within the Next PLC forces them to stay relevant and
adjust their operation in order to fulfil demand of the consumers which makes the
business more sustainable in long run (Asim, Z, 2019).
 Customers are willing to pay more: The adoption of effective corporate social
responsibility activities, the Next PLC charges more for their offered products and
services and the customers are also happy to pay for their services as the consumers are
also aware about the company activities regarding the betterment of the society
( Davídsdóttir, B., 2019).
 Attracts more investors: Investors always care about the business sustainability,
consumer loyalty and competitiveness. With the effective CSR practices, the Next PLC is
able to attract more investors towards their business activities which thus ultimately
benefited their company as well and thus enhances the profitability (Kahn, K.B., 2018).
 CSR activities can reduce production costs: The primary goal and purpose of any
business is to maximize their profit margin and adopting CSR activities does not mean
that company will compromise with their profits. The efficient corporate social
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responsibilities by the Next PLC allow them to sell their products at premium cost and
customers are also willing to take services from them. This profit maximization thus
helps the organization to reduce the production cost (Wang, Y.Y., 2021).
 Opens up new opportunities or markets: Effective CSR activities opens various
opportunities for the Next PLC and markets for the company as the company sets
themselves away from other companies ( Harris, L., 2020).
 Corporate responsibility makes the world a better place to live: The Next PLC have a lot
of influence on other companies as they are focusing on completion of their corporate
social responsibility in an efficient manner. By taking the responsibility for their impact,
Next PLC is able to help the world become better and healthier place for them to live in
(Tsuyuki, M., 2017).
(B) Archie Carroll’s CSR model for Next PLC
Corporate social responsibility has become popular after it was defined with the help of
Archie Carroll’s model which has been describing the whole concept with the help of a pyramid.
The pyramid is consists of four levels i.e. Economic, ethical, legal and philanthropic. The Next
PLC describes their corporate social responsibilities with the help of Archie Carroll’s model in
an efficient manner.
 Economic responsibility: The lowest level of the pyramid represents the business first
and foremost responsibility i.e. profit maximization. Without efficient profit, the
company is unable to run their business activities efficiently. The managers of the Next
PLC also believes that without profit generation, the company is unable to pay their
workers and employees are more interested towards losing their job if the company does
not start adopting CSR activities ( van Staden, C.J., 2018).
 . Being profitable is the only way for Next PLC in order to sustain in market environment
or in front of their competitors for longer duration of time and thus benefit society.
Moreover, along with this concept it has been also identified that it is the moral
responsibility of the company to give or offer goods and services to their consumers at
affordable prices (Kim, M., 2020).
 Legal responsibility: The second level of the pyramid represents the legal responsibilities
of the company which describes the legal obligations that needs to be followed by Next
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PLC according to the law and regulations. This is the most important responsibility out of
the other four responsibilities as the fulfilment of this responsibility ensures the effective
running of the Next PLC activities in long run. That is why the company follows this as
well. Employment laws, labour laws, competition with other companies, tax regulations,
health and safety related rules are some of the examples of legal responsibilities that need
to be followed by Next PLC. Failing in completion of these activities might result in bad
impression of firm in market place (Lee, G., 2020).
 Ethical responsibility: The third layer of the pyramid represents the ethical responsibility
which describe as doing right things and being fair at all the times for the employees as
well as their customers. The Next PLC ensures that they not only follows the legalities of
running their business activities but also do their activities ethically. However, this is not
the obligated element and not necessarily adopt by various companies but Next PLC
ensures the fulfilment of their ethical responsibilities towards everyone. This practice
helps their stakeholders to feel that the company is more into their morale activities along
with that their customers also feel comfortable while purchasing goods and services from
the organization ( Dmytriyev, S., 2017). Few examples that the Next PLC follows their
ethical responsibilities is that the company is environmental friendly, treat their suppliers
and employees in proper manner, make their stakeholders comfortable while doing
business, etc.
 Philanthropic responsibility: At the top of the pyramid, the smallest space that has been
occupied is with the philanthropic responsibility. All the business organizations has been
criticised for producing pollution within the environment, wastage of natural resources
and many more. In order to balance such activities the Next PLC gives back to the
community ( Marek, A., 2018). This is the maximum level of CSR activities as the
customers or investors wants to do business with those companies who are efficient in
their CSR activities and adopt more socially responsible practices in order to reduce the
negative effects within the environment and society as well. This responsibility is more
than just doing what is right for the organization along with holding true company values
to give back to society (Dahiya, R., 2019).
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